Proton Post-AGM Progress Updates

Proton’s domestic car sales are up by 17.5% in August – 11,786 units – compared to the 10,018 units in July, which was in turn 21% higher compared to the 8,328 units sold in June. Proton Edar Dealers’ Association (PEDA) is confident September sales would follow the trend and breach 14,000 unit sales. Sales targets for this year will likely be reduced though, after reevaluation of market conditions. Proton’s previous target was to increase market share for the financial year of 2007 to 45.8 percent, from 2006’s 41.4 percent. Proton’s current market share to date is only 32.4 percent, which is a big drop from the 2006 financial year. Satria Neo sales have been 2,750 units so far, with 4,000 orders in hand since it’s launch since June. The figures outperformed estimates set by the company.

More after the jump…Financial Status

While Proton made a loss in Q1 2006, it’s expected that on the overall, the company’s year 2006 financial performance will be profitable. The previous financial year had also shown a loss in Q1, but on the overall the financial year ended with a profit of RM779 million. However, we should note that this year’s losses were 3 times the amount lost in the same quarter last year, so comparing the numbers, turning around to profit this financial year should be tougher.

Inventory

Some dealers were holding stock of between 2.5 million to 3.5 million as of July, which translates to about 45 to 65 cars. There were some dealers who had it really bad, holding more than 100 units during the period. On average in an urban area, a dealer has to sell 30-40 cars a month to break even but some dealers were only doing fewer than 10 cars a month. Sales and production amounts are being monitored closely, and Proton wants to make sure stockpiles of cars do not exceed two months worth of production. Proton is working hard to clear it’s 2005 stock.

Quality Control

Warranty claims for the Proton Savvy and the Proton Satria Neo is currently at an average of 0.5%, which was quoted to be an improvement.

New Models

Proton acknowledges that a big problem with their sales is the lack of a fresh model range. Proton is making sure it’s new model development programs will result in new models that are designed according to market needs, not niche segment models. This will be very important for Proton to increase sales volume. This would mean no new niche models e.g.: pseudo-pickups, sporty hatchbacks. Volume = family sedans that are cheap enough for the bulk of the rakyat to buy, e.g.: perhaps an Iswara replacement? Two new models will be launched by mid-2007. Previously there was news of a car by the year end, but I guess this means it’s launch date is pushed back to before mid-2007.

Exports

Proton plans to increase CBU exports to the UK and Australia, as well as CKD assembly in Indonesia, Thailand, the Middle East and Eastern Europe. Proton is also studying the feasibility of CKD operations in China and India. Export shipments for the whole of 2005 was 13,512 units, while the exports for this year to date is 12,519 units – this means this year’s exports would exceed last year’s. Proton intends to raise exports to 100,000 units by the year 2008.

Proton also recently subscribed to an additional 255 million redeemable convertible preference shares in Proton Marketing Sdn Bhd at an issue price of 1 ringgit each – a total of RM255 million ringgit. This is to facilitate recapitalization and debt restructuring of Proton Cars (Australia) Pty Ltd and Proton Cars (UK) Ltd. Proton Marketing Sdn Bhd bought an additional 24 million redeemable shares at 1 pound each – 24 million pounds (RM164 million) in Proton Cars (UK) Ltd and additional 32.1 million shares in Proton Cars (Australia) Pty Ltd at 1 AUD each – 32.1 million AUD (RM89.5 million)

Partnerships

There are exploratory talks with PSA Peugeot Citroen. The talks with China’s Chery Automobile is also still underway, as previously reported in Proton’s Bursa Malaysia announcements. Second finance minister Nor Mohamed Yakcop says Proton and it’s majority stakeholder Khazanah Nasional (the government’s investment arm) are studying whether Proton needs a foreign investor or local entrepreneur’s help. “More and more, we think that there could be a role for a foreign investor who is in the motor industry to play an important role in bringing Proton to a higher level,” said Nor Mohamed Yakcop.

After dabbling for years in the IT industry, Paul Tan initially began this site as a general blog covering various topics of personal interest. With an increasing number of readers paying rapt attention to the motoring stories, one thing led to another and the rest, as they say, is history. An avid electronic gadget aficionado as well as big-time coffee lover, he's also the executive producer of the Driven motoring TV programme.

I think the increase of sales in August 2006 is also contribute & affected by the 'crazy' discount that given during 'Bulan Kemerdekaan' promotion for government staff. Maybe this is a good promotion package, but better beware not to reduce or lower the car quality if u (Proton) want to maintain the support & sales from local buyers, otherwise you will turn into ashes!

Dragging by its quality issue and other factors, the sales plummeted in Q106.

The sale of Satria Neo increased but I do not think Q1 lost can be balanced.

The main problem of Proton is missing/lack of direction and strategy. Till now, no clear direction (eg, biofuel, hybrid, etc) is defined for its new or incoming product. This is clearly seen from the introduction of Satria Neo. Neither technology advancement nor consumer-friendly feature is available.

Also, Proton price is not competitive as it is remain unchanged for its old model.

Some foreign carmakers have in-progress research like hydrogen fuel cell, night vision, biofuel, and so for to anticipate the future market and energy.

They have planned well and innovated their product for the benefit of consumer.

Proton still has far to go and need to faster their pace. Else it will suffer and losing the battle of open trade market.

Hope P1 tak cakap kosong and do it. At this volume, I don't think P1 can adopt current VERY BAD BIZ MODEL: –

1. Export market – Sell at lowest price but highest quality.

2. Domestic market – Sell at highest price but lowest quality.

This is done at the expense of rakyat and under crappy NAP protection.

The good biz model are: –

1. Export market – Sell at competitive price but highest quality.

2. Domestic market – Sell at lowest price but best quality.

So, do it and dismantle the crappy NAP to show to rakyat that P1 is boleh and Malaysia boleh!

If still continue current bad biz practice, it is not surprising the total sale volume for domestic and export even plummet below 100,000 units by 2008 as there are many new models to be launch in 2007 in our market. Needless to say how many models for export market under free market!

ask why we are so concern,busybody,nagetive thinking,etc,etc,commenting on proton,many will think,we are non patriotic,nothing to do,want to see proton failed,saddist.you are wrong,back in the good old days when i was a boy,i used to get punnish and cane by my dear father,after all the caneing and lecture,my father will console me with this words,( I punnish you becos I care about you future,I cane you becos I love you,) yes,our intention on proton are loud and clear,we love you so much,we dun want to see you failed,we wants to be able to feel proud about you! the reason why we commened so much on you is becos,you are so naughty and bad behaviour,please! wake up,start changing for the better,even if you need to married VW,OR MITSUBISHI OR GENERAL MOTORS,being a open mind father,I dun mind having a daughter in law,be it german,japanese or american,fine with me,so long you can be happy and sucessful in all your future undertaking!!!

"Satria Neo sales have been 2,750 units so far, with 4,000 orders in hand since itâ€™s launch since June. The figures outperformed estimates set by the company."

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Satria Neo target annual sales is around 30K unit. Since launch in June 06 till today is approximately 3 months. If the figure is outperformed estimates by P1, then the delivered figure (2,750 units) shall take into consideration (June to Sept 06) and the orders 4,000 units shall be tabulated accordingly in coming month once it is delivered to customer! This shall be the case and say 4,000 units is delivered on or before Dec 06, then on average Satria Neo sales is around 1,000 units per month which is well below target!

There is no issue on backlog like Perodua MyVi case as currently, Proton plant according to their claimed is under capacity by 40%.

yea….watever happened to that legal action taken against previous staff of proton leadership etc? no follow up? well that was expected anyway. same as all of these high profile court cases we see in the newspapers.

it seems proton can turn up profits in the millions even with no car sales. amazing. maybe MAS can turn a profit by flying domestically only with one flight/week per destination. proton really is a miracle company.

if i was proton i'd be pissing in my pants right now. sales across the board are horrible and they expect to turn a profit by years end.

Today's news on banks tightening the croteria in giving out loans, Proton sales will definitely be affected as Proton's customers are mostly the lower income bracket which will be singled out by the bank's new move. Good luck Proton and Perodua.

What concerns the consumer the most is the offering of two new product. Let's us perdana replacement model. That's one. The other? Wira/Waja replacement might be good. As someone rightly point out the first picture of the SatriaNeo was two years ago, and there is none so far for any new model. Blowing hot air only? I wonder if they manage to secure a JV deal on certain models, would they be able to fulfil their promise?

So far, the new Proton models are not doing very well at all. Gen-2 depreciates like hell, Savvy can compete with Myvi, Neo well just doesn't appeal. Crash for collision? Sell now or regret later.

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